Several friends and family members have mentioned to me that they've received their stimulus checks from the IRS within the last week or so.  Many are also receiving income tax refunds around this time.  As a result, I've been reflecting on the best way to manage this money, and I suppose others are too.  So allow me to share my thoughts and recommendations.

Is Your Income Stable?

If so, be grateful to God for providing for your needs.  Assuming you have a balanced budget and your needs are met without the tax refund and/or stimulus check, take a look at your emergency fund.  Set a target balance to cover 3-6 months of basic living expenses.  Check!  

Take a look at any debts (especially credit cards) you may be carrying, and consider what it would look like to apply this extra cash toward eliminating that burden.  What would your budget look like without those extra debt payments?  

How is your retirement account looking?  This could be a good opportunity to add to your long term savings plan.

And consider being generous and sharing with others - consider your local church, ministry, non-profit, healthcare worker, food service worker, etc.  It feels good to give! 

What If Your Income Isn't Stable?

Unfortunately, many people are out of work right now or have seen a reduction in income through reduced hours, furloughs, lay-offs, etc.  These are hard times, and it can be difficult to cope.  If you're in that situation, there is hope!

Start by focusing on the essentials 1) food, 2) utilities, 3) shelter and 4) transportation, in that order.  It's critical to provide food for yourself and your family, to keep the lights on and water running, to keep a roof over your head, and to maintain reliable transportation.  

So use that stimulus check or tax refund where it matters, and tuck the rest into your emergency fund.  And work hard to find a temporary job to supplement that missing income.